US municipalities and port and airport authorities hold a large share of US public assets, with roughly 20,000 municipal governments and more than 500 authorities managing critical infrastructure exposed to both property damage and operational interruption.
Public entities carry a distinctive risk profile:
- Responsibility extends beyond owned buildings to water systems, roads, power infrastructure, and the continuity of city services.
- A catastrophe simultaneously destroys assets and multiplies spending on shelter, staffing, and emergency response.
- Recovery funding is heavily dependent on federal aid, which arrives on its own timetable.
- Budgets are fixed and appropriated, with little room to absorb unplanned costs mid-cycle.
- Ports and airports generate revenue from throughput, which stops when operations stop, regardless of whether facilities were damaged.
In 2021, Winter Storm Uri caused a systemic failure of municipal infrastructure in Texas, with over 4.5 million customers losing power and nearly half of Texans experiencing water service disruptions. In Austin alone, the water system lost 325 million gallons in a few days due to burst pipes.
Parametric insurance provides rapid, predefined liquidity immediately after a qualifying event, reducing financial stress and allowing public entities to face first-response emergencies without waiting on settlement.
Risk Landscape
These events cause injuries, displace populations, and interrupt city services. Ports and airports face severe business interruption losses and capital-intensive repairs on top of that.
Financial Pain Points
- Delayed recovery timeline: Traditional insurance claims for major catastrophes can take months or even years to settle, creating cash flow pressure for entities operating on fixed budgets with limited liquidity. FEMA reimbursements can face long delays, taking several months or even years before being delivered.
- Uncovered first-response costs: Standard policies often include restrictive sub-limits for debris removal, and typically do not cover first-responder temporary staffing or overtime pay, nor fund emergency services such as aid tents and food pantries.
- High retention: Municipalities often retain a significant portion of risk, notably through many aggregated losses that fall below deductibles.
- Shared limits in risk pools: Public entities are often insured through a risk pool where multiple participants draw from the same coverage limit. In a large-scale catastrophe affecting many members, each insured may receive only a portion of the available funds, as the total limit must be distributed among all affected participants.
- Non-damage business interruption at ports and airports: Revenue losses from flight cancellations, terminal closures, or halted cargo operations are typically excluded from traditional policies when there is no physical damage on site.
Customer Profile
Parametric solutions for the public sector are designed for entities responsible for public assets, services, and infrastructure revenue.
Typical clients include:
- Cities, counties, and townships
- Port authorities and marine terminal operators
- Airport authorities and airport operators
- Transit and transportation authorities
- Water, wastewater, and municipal utility districts
- Public entity risk pools and self-insured trusts
- Special districts and public housing authorities
- State agencies managing public infrastructure
Relevant asset types include:
- Municipal buildings, emergency services facilities, and public works depots
- Water treatment plants, pumping stations, and distribution networks
- Terminals, runways, quays, cranes, and cargo handling equipment
- Roads, bridges, and stormwater infrastructure
- Parks, public spaces, and coastal defenses
Parametric Coverage in 3 Steps
Set Parameters
The cover is based on custom-made parameters and pre-agreed indemnity.
Monitor Triggers
The evolution of these parameters is monitored using verified third-party data from reputable providers such as NOAA and the USGS, and where relevant from on-site sensors installed by third-party experts.
Get Paid Fast
When a triggering event occurs, the client notifies the insurer of their loss and swiftly receives compensation.
Our case studies are all over the world
Utilizing Machine Learning and real-time monitoring from satellite imagery & IoT, our state-of-the-art technology helps businesses bounce back faster against climate, cyber and other emerging risks.
The Solutions We Provide
Non-Damage Business InterruptionCoverage triggered by measured event intensity, independent of physical damage on site. It responds to the revenue ports and airports lose when operations are suspended and throughput stops, and to the cost of city services interrupted by an event, a category traditional policies exclude for want of a damage trigger. | Retention and Deductible BuydownConvert retained catastrophe exposure into a predictable, trigger-based payout that does not have to be absorbed by an appropriated budget mid-cycle. This addresses both percentage-based deductibles on major events and the aggregated smaller losses that fall below them across a dispersed portfolio of public assets. |
First-Response LiquidityImmediate, flexible capital in the days following a qualifying event, sized to fund the first-response phase before traditional settlement or FEMA reimbursement arrives. Because the payout is not tied to a proven loss, it can cover debris removal, first-responder overtime and temporary staffing, shelter operations, and aid distribution. | Additional Capacity Alongside Shared LimitsCover triggered independently of a public entity risk pool's shared limit and calibrated to major events. It keeps your recovery off the pooled limit, avoiding proration when a catastrophe affects several participants and reducing the potential need to reinstate. |
Why Parametric Works
✓ Rapid liquidity: Payouts are confirmed in days and paid in weeks, providing critical liquidity during the post-event recovery period.
✓ Flexible capital: Payouts are not tied to a specific loss assessment and can be used to offset revenue losses or support operational recovery.
✓ No claims adjustments: Coverage is triggered by predefined parameters, eliminating lengthy loss adjustment processes across dispersed public infrastructure.
✓ Complements traditional insurance in risk pools: Parametric coverage is triggered independently of shared limits, absorbing deductibles for smaller events and protecting against limit exhaustion in major catastrophes, which supports full recovery rather than prorated payouts.
FAQ
How does parametric insurance work for a city or public authority?
The cover is built around an objective, measurable parameter tied to your locations, such as flood depth at a sensor, wind speed at a given distance, ground shaking intensity, or temperature thresholds. When independent data confirms the parameter has been met, a pre-agreed amount is paid, without a damage assessment.
We rely on FEMA. Why buy insurance on top?
Federal reimbursement is a long-cycle process that can take months or years, and it does not remove the need for cash in the first weeks. A parametric layer is designed to land in that window, funding first response while other recovery funding works through its process. It sits ahead of, not instead of, the rest of the recovery stack.
What can the payout be spent on?
Because the trigger is event intensity rather than a proven loss, the capital is flexible. Public entities typically use it for debris removal, first-responder overtime and temporary staffing, shelter and aid operations, emergency repairs, and revenue replacement.
Our airport was not damaged but flights were canceled for days. Is that covered?
That is a core use case. A non-damage business interruption structure triggers on the event itself, for example a Category 3 or higher hurricane passing within a defined radius, so it responds to lost revenue even when the facility is intact.
We are in a public entity risk pool. Does this conflict with it?
No, it complements it. Pool limits are shared, so a widespread catastrophe can leave each member with a prorated share. A parametric layer is triggered independently, which stabilizes your own recovery and reduces the pressure to reinstate the pool limit.
How is a flood trigger made accurate for a specific city?
Flood is highly local, so triggers can be built on on-site sensors installed by third-party experts at the locations you care about, rather than on a wide-area index alone. This is the main lever for making the cover track your actual exposure.
What do you need to provide a quote?
The insured locations, the limit sought, and historical pain points such as past event costs, retained losses, or interruption periods. We structure the cover with your broker.
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20+ perils covered, written on A+ paper with best-in-class (re)insurers
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USD 140M capacity per policy for earthquake and hurricane in North America and the Caribbean
Contact Us
Whether you're quoting a complex risk, looking to break into new markets, or just curious about parametric insurance, our team is here to help you win. Reach out and we will get back to you within 48 hours.
